Condrashoff v. General Motors LLC ( 2024 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 GEORGE W. CONDRASHOFF, et al., No. 2:24-cv-00108-DAD-DB 12 Plaintiffs, 13 v. ORDER GRANTING DEFENDANT’S MOTION TO DISMISS CERTAIN CLAIMS 14 GENERAL MOTORS LLC, (Doc. No. 5) 15 Defendant. 16 17 This matter is before the court on defendant’s motion to dismiss certain claims brought by 18 plaintiffs in this action. (Doc. No. 5.) On February 5, 2024, the pending motion was taken under 19 submission to be decided on the papers pursuant to Local Rule 230(g). (Doc. No. 7.) For the 20 reasons explained below, the court will grant defendant’s motion to dismiss. 21 BACKGROUND 22 Plaintiffs George W. Condrashoff and Benita Gwyn Asher bring this automobile “lemon 23 law” and fraud action against defendant General Motors LLC (“defendant” or “GM”), alleging 24 the following in their complaint. In August or September 2020, plaintiffs acquired a new 2020 25 Chevrolet Bolt (“the subject vehicle”) from “Tracy Chevrolet, an authorized dealer and agent of 26 [defendant GM].”1 (Doc. No. 1-1 at 3, ¶¶ 4–6.) As part of that transaction, GM “issued an 27 1 In their complaint, plaintiffs allege two different dates of acquisition of the subject vehicle: 28 August 14, 2020 (paragraph 6) and September 6, 2020 (paragraph 25). (Doc. No. 1-1 at 3, 6.) 1 express warranty which would only be issued by [GM] as a result of the sale of the vehicle.” (Id. 2 at ¶ 6.) According to plaintiffs, the sale of the subject vehicle by a GM dealership, coupled with 3 the issuance of the express warranty, created a transactional and contractual relationship between 4 GM and plaintiffs, such that the dealership is an agent of GM for the purpose of the transaction. 5 (Id.) GM does “not sell vehicles directly to members of the general public.” (Id.) 6 At the time plaintiffs acquired the subject vehicle, GM had advertised the Bolt “as a long 7 range, affordable electric vehicle on its website,” and GM “dealership personnel assured plaintiff 8 of the long-range and safe nature of the vehicle.” (Id. at ¶ 26.) 9 In October 2015, GM touted the Bolt as an affordable, long range vehicle. (Id. at ¶ 14.) 10 In a January 2016 press release, GM represented that the Bolt would have a battery range over 11 200 miles because the battery has improved thermal operating performance. (Id. at ¶ 15.) 12 In December 2016, GM first became aware of issues with the battery and energy 13 management related issues in the Bolt and instituted a battery exchange program to replace 14 defective batteries. (Id. at ¶ 16.) Despite this knowledge, GM began running commercials in 15 January 2017 featuring the range of the battery in the Bolt, a “long range” and “affordable” 16 vehicle. (Id. at ¶ 17.) In October 2017, the National Highway Traffic Safety Administration 17 (“NHTSA”) “published a warning that overcharging lithium ion batteries, such as the battery in 18 the Bolt, can result in spontaneous ignition.” (Id. at ¶ 18.) In November 2017 and April 2018, 19 GM created repair programs for the Bolt in response to “issues with low voltage batteries” and 20 “to update the vehicle’s software for a low voltage condition and reports of vehicles losing 21 propulsion.” (Id. at ¶¶ 19–20.) In August 2018, GM “created another program related to the 22 battery’s software and its ability to monitor the charge of the battery.” (Id. at ¶ 22.) In March 23 2019, GM became aware of the first battery fire involving the Bolt. (Id. at ¶ 23.) Despite GM’s 24 knowledge of the fire risk posed by charging the battery to full capacity, later that year, in 25 October 2019, GM held an event to address questions regarding the Bolt, and one of its 26 employees and Bolt battery expert, Adam Piper, stated the following on behalf of GM: “We 27 engineered the battery system so that you can charge to 100% and maximize range. Do whatever 28 is best for your personal circumstances. If you want maximum range, charge to 100%.” (Id. at 1 ¶ 24.) By August 2020, GM “was aware of at least 12 fires” involving the Bolt. (Id. at ¶ 25.) 2 These alleged events “occurred prior to plaintiffs’ purchase of the subject vehicle” and evidence 3 GM’s knowledge of the defect in the Bolt battery. (Id. at ¶ 23.) Yet, GM did not “disclose the 4 battery issues to plaintiffs or alter its marketing campaign” for the Bolt. (Id.) The marketing 5 materials for the 2020 Bolt pictured the vehicle as capable of being charged indoors in a garage. 6 (Id. at ¶ 29.) 7 In October 2020, NHTSA opened an investigation into the Bolt. (Id. at ¶ 27.) On an 8 unspecified date in 2021, GM issued a recall notice for the Bolt, “stating that its batteries may 9 ignite when nearing a full charge.” (Id. at ¶ 30.) Through this recall, GM “warned plaintiff that 10 the vehicle’s charge should not exceed 90%, the battery mileage should not fall below seventy 11 (70) miles remaining, and the vehicle should not be parked indoors overnight.” (Id.) 12 According to plaintiffs, GM had “marketed the subject vehicle in [a] false and misleading 13 manner by advertising it as safe and function[al],” but it “is neither safe nor functional for normal 14 use due to the presence of defective and dangerous lithium-ion battery modules.” (Id. at ¶ 28.) 15 GM “falsely represented that the subject vehicle is safe and functional for normal use” but the 16 vehicle’s “batteries may ignite when they are either fully charged or fall below seventy (70) miles 17 remaining mileage,” and “[t]he vehicle also cannot be parked inside overnight due to fire risk.” 18 (Id. at ¶ 13.) Further, the alleged affirmative misrepresentations and fraudulent omissions by 19 defendant caused plaintiffs to suffer injury in the form of anxiety, fear, and emotional distress. 20 (Id. at ¶¶ 32, 44, 93.) 21 In their complaint, plaintiffs bring five claims against defendant under California law: 22 three claims of breach of warranties in violation of the Song-Beverly Consumer Warranty Act, a 23 claim of common law fraud, and a claim under California’s Unfair Competition Law, California 24 Business and Professions Code §§ 17200, et seq. (“UCL”). (Doc. No. 1-1 at 2.) 25 On January 16, 2024, defendant filed the pending motion to dismiss only plaintiffs’ fourth 26 claim (fraud) and fifth claim (UCL). (Doc. No. 5.) Plaintiffs filed an opposition to the pending 27 motion on January 30, 2024. (Doc. No. 6.). Defendant filed its reply thereto on February 7, 28 2024. (Doc. No. 8.) 1 LEGAL STANDARD 2 A. Motion to Dismiss Under Rule 12(b)(6) 3 The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal 4 sufficiency of the complaint. N. Star Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir. 5 1983). “Dismissal can be based on the lack of a cognizable legal theory or the absence of 6 sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901 7 F.2d 696, 699 (9th Cir. 1990). A plaintiff is required to allege “enough facts to state a claim to 8 relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A 9 claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw 10 the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. 11 Iqbal, 556 U.S. 662, 678 (2009). 12 In determining whether a complaint states a claim on which relief may be granted, the 13 court accepts as true the allegations in the complaint and construes the allegations in the light 14 most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984). However, 15 the court need not assume the truth of legal conclusions cast in the form of factual allegations. 16 U.S. ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not 17 require detailed factual allegations, “it demands more than an unadorned, the-defendant- 18 unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678. A pleading is insufficient if it offers 19 mere “labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” 20 Twombly, 550 U.S. at 555; see also Iqbal, 556 U.S. at 676 (“Threadbare recitals of the elements 21 of a cause of action, supported by mere conclusory statements, do not suffice.”). It is 22 inappropriate to assume that the plaintiff “can prove facts that it has not alleged or that the 23 defendants have violated the . . . laws in ways that have not been alleged.” Associated Gen. 24 Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). 25 In ruling on a motion to dismiss under Rule 12(b)(6), the court is permitted to consider 26 material that is properly submitted as part of the complaint, documents that are not physically 27 attached to the complaint if their authenticity is not contested and the plaintiffs’ complaint 28 ///// 1 necessarily relies on them, and matters of public record. Lee v. City of Los Angeles, 250 F.3d. 2 668, 688–89 (9th Cir. 2001). 3 B. Heightened Pleading Standard Under Rule 9(b) 4 “When an entire complaint, or an entire claim within a complaint, is grounded in fraud 5 and its allegations fail to satisfy the heightened pleading requirements of Rule 9(b), a district 6 court may dismiss the complaint or claim.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107 7 (9th Cir. 2003). Under Rule 9(b), the “circumstances constituting the alleged fraud [must] be 8 specific enough to give defendants notice of its particular misconduct . . . so they can defend 9 against the charge and not just deny that they have done anything wrong.” Kearns v. Ford Motor 10 Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (internal quotation marks omitted) (quoting Bly-Magee 11 v. California, 236 F.3d 1014, 1019 (9th Cir. 2001)). To satisfy the particularity standard of 12 Rule 9(b), “a pleading must identify the who, what, when, where, and how of the misconduct 13 charged, as well as what is false or misleading about the purportedly fraudulent statement, and 14 why it is false.” Moore v. Mars Petcare US, Inc., 966 F.3d 1007, 1019 (9th Cir. 2020) 15 (quotations omitted) (quoting Davidson v. Kimberley-Clark Corp., 889 F.3d 956, 964 (9th Cir. 16 2018)). However, “[m]alice, intent, knowledge and other conditions of a person’s mind may be 17 alleged generally.” Irving Firemen’s Relief & Ret. Fund v. Uber Techs., Inc., 998 F.3d 397, 404 18 (9th Cir. 2021) (quoting Fed. R. Civ. P. 9(b)); see also Klaehn v. Cali Bamboo LLC, No. 21- 19 55738, 2022 WL 1830685, at *2 (9th Cir. 2022)2 (“Under Fed. R. Civ. P. 9(b), a plaintiff must 20 plead circumstances from which a court can plausibly infer the defendant’s knowledge.”). 21 ANALYSIS 22 In the pending motion, defendant argues that plaintiffs have failed to state cognizable 23 fraud and UCL claims because their allegations are deficient for several reasons. (Doc. No. 5.) 24 As for the fraud claim and the “fraudulent” prong of the UCL claim, defendants contend that: (i) 25 plaintiffs’ allegations of fraud lack the requisite specificity of “how, when, where, to whom, and 26 by what means the alleged fraud occurred”; (ii) “plaintiffs fail to allege facts plausibly showing 27 2 Citation to the unpublished Ninth Circuit opinions such as those cited here and elsewhere in this 28 order is appropriate pursuant to Ninth Circuit Rule 36-3(b). 1 that GM knew of and intentionally misrepresented or concealed any material facts before 2 plaintiffs bought their vehicle”; (iii) plaintiffs’ allegations that GM advertised EPA mileage 3 estimates cannot form the basis of a misrepresentation claim as a matter of law; (iv) plaintiff does 4 not sufficiently allege a transactional relationship with GM that would trigger a duty to disclose; 5 and (v) plaintiffs’ fraudulent concealment claim is barred by the economic loss rule. (Id. at 8–9.) 6 As for the “unlawful” prong of plaintiffs’ UCL claim, defendant argues that this claim cannot be 7 predicated on plaintiffs’ warranty claims, and plaintiffs have not identified any other statute or 8 law on which they predicate their UCL claim. (Id. at 20–21.) As for the “unfair” prong of the 9 UCL claim, defendant argues that this claim fails because plaintiffs “do not reference any 10 established public policy that GM’s actions had violated or claim that the conduct is immoral, 11 unethical, oppressive, or unscrupulous.” (Id. at 21–22.) 12 Plaintiffs’ opposition brief is largely unhelpful and does not address the vast majority of 13 the arguments advanced by defendant in its motion to dismiss. Apart from a single page of 14 perfunctory legal argument regarding the existence of a transactional relationship and the 15 economic loss rule, plaintiffs’ opposition brief merely provides a brief summary of plaintiffs’ 16 allegations (without any citations to paragraphs in the complaint) and recites the applicable legal 17 standard for Rule 12(b)(6) motions. (Doc. No. 6.) Indeed, by their silence, plaintiffs appear to 18 concede the merits of the bulk of defendant’s arguments. See Lopez v. County of Los Angeles, 19 No. 3:15-cv-03804-TEH, 2016 WL 54123, at *2 (N.D. Cal. 2016) (“[B]ecause Plaintiff failed to 20 oppose many arguments in the instant motion to dismiss, the Court may treat such non-opposition 21 as implicit consent to the merits of the arguments asserted, and consequently as consent to 22 dismissal of the Complaint.”); Lou v. JP Morgan Chase Bank N.A., No. 3:17-cv-04157-WHO, 23 2018 WL 1070598, at *2 (N.D. Cal. Feb. 26, 2018) (“Courts have found that a failure to oppose 24 an argument serves as a concession.”). 25 Nonetheless, the court will proceed to analyze whether plaintiffs have sufficiently alleged 26 cognizable fraud and UCL claims. 27 ///// 28 ///// 1 A. Plaintiffs’ Fraud Claim 2 Under California law, “[t]he elements of fraud are: (1) a misrepresentation (false 3 representation, concealment, or nondisclosure); (2) knowledge of falsity (or scienter); (3) intent to 4 defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting damage.” Robinson 5 Helicopter Co. v. Dana Corp., 34 Cal. 4th 979, 990 (2004) (citing Lazar v. Superior Ct., 12 Cal. 6 4th 631, 638 (1996)). To state a cognizable fraud claim, a plaintiff must allege facts to satisfy 7 these elements with the requisite particularity and specificity of Rule 9(b). See Moore, 966 F.3d 8 at 1019; Kearns, 567 F.3d at 1124. 9 Plaintiffs’ fraud claim is based on two separate theories as to the first element: affirmative 10 misrepresentation and fraudulent concealment. (Doc. No. 1-1 at 13–14.) As noted above, 11 defendant moves to dismiss this claim, arguing that plaintiffs’ allegations are insufficient to state 12 a cognizable fraud claim under either theory. (Doc. No. 5.) Because the court agrees that 13 plaintiffs have not sufficiently alleged facts that would satisfy the first element of their fraud 14 claim, the court will dismiss this claim on that basis and will not address defendant’s arguments 15 regarding the other elements. 16 1. Affirmative Misrepresentation 17 To support their affirmative misrepresentation theory of fraud, plaintiffs allege that GM 18 marketed on its website and in advertisements that the Bolt “had a long range and was safe,” and 19 these marketing statements “were echoed by GM’s dealership personnel at the time of sale who 20 assured plaintiffs that the vehicle had a long range and was safe.” (Doc. No. 1-1 at 12, ¶ 80.) 21 Plaintiffs allege that GM’s “representations were false because the vehicle in fact contains a 22 lithium-ion battery that causes the vehicle to overheat during prolonged use, resulting in a 23 substantial reduction in the range capability of the vehicle.” (Id. at ¶ 81.) 24 Plaintiffs’ allegations are plainly insufficient under the heightened pleading standard of 25 Rule 9(b), which “requires the pleader of fraud to ‘state the time, place, and specific content of 26 the false representations as well as the identities of the parties to the misrepresentation.’” In re 27 Volkswagen “Clean Diesel” Mktg., Sales Pracs., & Prod. Liab. Litig., No. 3:15-MD-02672- 28 CRB-JSC, 2019 WL 4581340, at *5 (N.D. Cal. Sept. 20, 2019) (quoting Odom v. Microsoft 1 Corp., 486 F.3d 541, 553 (9th Cir. 2007) (en banc)). For example, a plaintiff alleging affirmative 2 misrepresentations in marketing and advertising must “specify what the television advertisements 3 or other sales material specifically stated,” “when he was exposed to them and which ones he 4 found material.” Kearns, 567 F.3d at 1126 (affirming the district court’s dismissal of a fraud 5 claim where the plaintiff “failed to articulate the who, what, when, where, and how of the 6 misconduct alleged,” and thus “failed to plead his averments of fraud with particularity”). In their 7 complaint, plaintiffs have failed to plead any such specifics with regard to the alleged 8 misrepresentations by defendant. Plaintiffs’ allegation that “defendant’s mileage range 9 advertisements were part of an extensive advertising campaign, and plaintiffs were exposed to the 10 advertisements” is not specific enough to satisfy Rule 9(b)’s pleading standard. See also In re 11 Volkswagen “Clean Diesel” Mktg., 2019 WL 4581340, at *5–6 (dismissing a fraud claim brought 12 against Volkswagen because the “plaintiffs have not identified the time and place of 13 Volkswagen’s representations to them,” “plaintiffs have not adequately identified the parties to 14 the representations,” “plaintiffs have not identified which of [Volkswagen’s] advertisements they 15 were exposed to and found material,” and “[g]eneral allegations about Volkswagen’s media 16 campaign are not sufficient to support plaintiffs’ misrepresentation claims”). Moreover, 17 plaintiffs’ allegations of statements made by Adam Piper regarding charging the Bolt battery to 18 100% are insufficient to save their fraud claim because, as defendant emphasizes in its motion 19 and which plaintiffs wholly ignore in their opposition, plaintiffs allegations are “devoid of any 20 clarification as to whom Mr. Piper said this to, whether plaintiffs heard this statement, and 21 whether plaintiffs relied on it.” (Doc. No. 5 at 14.) 22 In addition, to the extent plaintiffs intend to allege that defendant’s affirmative 23 misrepresentations consisted of GM’s marketing and advertising of the Bolt’s mileage range of 24 over 200 miles on a full battery, those allegations cannot support a fraud claim as a matter of law. 25 See Gray v. Toyota Motor Sales, U.S.A., Inc., 554 F. App’x 608, 609 (9th Cir. 2014) (“When 26 applied to the fuel economy context, ‘[a]s a matter of law, there is nothing false or misleading’ 27 about a car manufacturer’s advertising that identifies the EPA fuel economy estimates for the car. 28 Thus, no misrepresentation occurs when a manufacturer merely advertises EPA estimates.”) 1 (quoting Paduano v. Am. Honda Motor Co., 169 Cal. App. 4th 1453, 1470 (2009)). Indeed, other 2 courts have specifically considered GM’s representations with regard to fuel economy and 3 mileage range based on EPA estimates for the same vehicle at issue in this case (the Bolt) and 4 have found such allegations to be insufficient to support the plaintiffs’ fraud claims as a matter of 5 law. See In re Chevrolet Bolt EV Battery Litig., 633 F. Supp. 3d 921, 960 (E.D. Mich. 2022) 6 (dismissing the affirmative misrepresentation-based fraud claim even though the plaintiffs had 7 identified “several statements by GM about the Bolt’s range: several pre-release statements that 8 the Bolt was ‘designed to offer more than 200 miles of range,’” and explaining that “[o]nly where 9 a manufacturer makes specific additional representations that go beyond those EPA estimates are 10 statements of fuel efficiency and range actionable”) (citation and internal quotation marks 11 omitted); see also Kuehl v. Gen. Motors LLC, No. 2:23-cv-06980-SB-SK, 2023 WL 8353784, at 12 *2 (C.D. Cal. Nov. 17, 2023) (“GM’s marketing of the Bolt’s 259-mile range is [] not a 13 misrepresentation as a matter of law.”); McDonald v. Gen. Motors LLC, No. 23-cv-1584-KK- 14 DFM, 2024 WL 1601844, at *5 (C.D. Cal. Feb. 23, 2024) (“Plaintiff has failed to adequately 15 plead an affirmative misrepresentation claim to the extent it is predicated upon alleged 16 misrepresentations regarding the [Bolt’s] battery capacity.”); Antonov v. Gen. Motors LLC, 17 No. 8:23-cv-01593-FWS-MJR, 2024 WL 217825, at *7–8 (C.D. Cal. Jan. 19, 2024) (dismissing 18 the plaintiff’s affirmative misrepresentation-based fraud claim regarding GM’s mileage 19 advertisements for the Bolt). 20 For these reasons, defendant’s motion to dismiss plaintiffs’ fraud claim based on a theory 21 of affirmative misrepresentations will be granted. 22 2. Fraudulent Concealment 23 “A fraud claim based upon the suppression or concealment of a material fact must involve 24 a defendant who had a legal duty to disclose the fact.” Hoffman v. 162 N. Wolfe LLC, 228 Cal. 25 App. 4th 1178, 1186 (2014). In other words, “[a] fraud claim based on concealment is actionable 26 only if there is a duty to disclose.” Kuehl, 2023 WL 8353784, at *3. 27 Under California law, a duty to disclose may arise where: (1) “the defendant is the plaintiff’s fiduciary;” (2) “the defendant has 28 exclusive knowledge of material facts not known or reasonably 1 accessible to the plaintiff;” (3) “the defendant actively conceals a material fact from the plaintiff;” or (4) “the defendant makes partial 2 representations that are misleading because some other material fact has not been disclosed.” 3 4 Antonov, 2024 WL 217825, at *10 (quoting Collins v. eMachines, Inc., 202 Cal. App. 4th 249, 5 255 (2011)). 6 In their complaint, plaintiffs merely recite the second, third, and fourth circumstances 7 under which a duty to disclose may arise and allege in conclusory fashion that defendant had a 8 duty to disclose that the Bolt’s battery was unsafe at the time of their purchase. (See Doc. No. 1-1 9 at 15, ¶ 89.) Such “threadbare recitals” of the requisite elements, “supported by mere conclusory 10 statements, do not suffice.” See Iqbal, 556 U.S. at 676; see also Antonov, 2024 WL 217825, at 11 *10 (finding that the plaintiff’s “allegations are merely ‘[t]hreadbare recitals’ of circumstances in 12 which the duty to disclose can arise under California law that are otherwise unsupported by 13 specific facts and thus insufficient to demonstrate a duty to disclose”). Plaintiffs have therefore 14 failed to plead their fraudulent concealment claim with particularity, even under the more relaxed 15 pleading standard that applies to omission-based fraud claims. See Tappana v. Am. Honda Motor 16 Co., 609 F. Supp. 3d 1078, 1088 (C.D. Cal. 2022) (explaining that to plead a claim based on fraud 17 by omission, the plaintiff “must both describe the content of the omission and where the omitted 18 information should or could have been revealed”). 19 Thus, the court will also grant defendant’s motion to dismiss plaintiff’s fraud claim based 20 on a theory of fraudulent concealment. 21 B. Plaintiffs’ UCL Claim 22 California’s UCL prohibits “any unlawful, unfair, or fraudulent business act or practice.” 23 Cal. Bus. & Prof. Code §§ 17200, et seq. “The UCL is a broad remedial statute that permits an 24 individual to challenge wrongful business conduct ‘in whatever context such activity might 25 occur.’” Lozano v. AT&T Wireless Servs., Inc., 504 F.3d 718, 731 (9th Cir. 2007) (quoting Cel- 26 Tech Commc’ns, Inc. v. Los Angeles Cellular Tele. Co., 20 Cal. 4th 163, 181 (1999)). Here, 27 plaintiffs allege that defendant’s conduct violated all three prongs of the UCL. (Doc. No. 1-1 at 28 15–19.) In moving to dismiss this cause of action, defendant argues that plaintiffs have not 1 adequately alleged their UCL claim under any prong. (Doc. No. 5 at 20–22.) 2 1. “Fraudulent” Prong 3 To plead a UCL claim predicated on a defendant’s allegedly fraudulent business practices, 4 a plaintiff must “state with particularity the circumstances constituting fraud” in support of the 5 claim. See Kearns, 567 F.3d at 1124 (quoting Fed. R. Civ. P. 9(b)); Deutsch v. Flannery, 823 6 F.2d 1361, 1365 (9th Cir. 1987) (“[A] pleading satisfies the particularity requirement [of Rule 7 9(b)] if it identifies the circumstances constituting fraud so that the defendant can prepare an 8 adequate answer from the allegations.”). 9 For the same reasons discussed above regarding plaintiffs’ failure to sufficiently allege 10 their fraud claim with particularity, plaintiffs have likewise failed to sufficiently allege a UCL 11 claim predicated on a fraudulent business practice. See McDonald, 2024 WL 1601851, at *6 12 (“Because Plaintiff’s entire UCL claim is grounded in fraud but does not adhere to the 13 particularity standard of Rule 9(b), Plaintiff has failed to adequately plead her UCL claim.”); 14 Antonov, 2024 WL 217825, at *12 (“Because Plaintiff’s claim for a violation of the UCL’s 15 ‘fraudulent prong’ relies on the same theories of fraudulent misrepresentation and fraudulent 16 concealment that the court found to be insufficient [], the court concludes Plaintiff has also failed 17 to allege a violation of the ‘fraudulent prong’ of the UCL.”) 18 Accordingly, the court will also grant defendant’s motion to dismiss plaintiffs’ UCL claim 19 based on the “fraudulent” prong. 20 2. “Unlawful” Prong 21 “By proscribing any unlawful business practice, [the UCL] borrows violations of other 22 laws and treats them as unlawful practices that the unfair competition law makes independently 23 actionable.” Cel-Tech, 20 Cal. 4th at 180 (citation and internal quotation marks omitted). 24 “Virtually any law—federal, state or local—can serve as a predicate for an action under [the 25 UCL].” Smith v. State Farm Mut. Auto. Ins. Co., 93 Cal. App. 4th 700, 718 (2001). However, 26 “[w]here a plaintiff cannot state a claim under the ‘borrowed’ law, he cannot state a UCL claim 27 either.” Dawson v. HITCO Carbon Composites, Inc., No. 16-cv-7337-PSG-FFM, 2017 WL 28 7806618, at *8 (C.D. Cal. Jan. 20, 2017). 1 In its motion to dismiss, defendant emphasizes that plaintiffs did not identify any 2 predicate law that is borrowed to support their UCL claim under the “unlawful” prong. (Doc. No. 3 5 at 20–21.) As noted above, in their opposition, plaintiffs did not respond to any of defendant’s 4 arguments regarding their UCL claim. While not entirely clear, to the extent plaintiffs intend for 5 their UCL claim to borrow from their insufficiently alleged fraud claims, their UCL claim under 6 the “unlawful” prong clearly fails. See Pellerin v. Honeywell Int’l, Inc., 877 F. Supp. 2d 983, 992 7 (S.D. Cal. 2012) (“A UCL claim must be dismissed if the plaintiff has not stated a claim for the 8 predicate acts upon which he bases the claim.”). To the extent plaintiffs intend for their UCL 9 claim to borrow from their claim of breach of express warranties in violation of the Song-Beverly 10 Act, that too fails. See Elias v. Hewlett-Packard Co., 903 F. Supp. 2d 843, 859 (N.D. Cal. 2012) 11 (dismissing the plaintiff’s UCL claim to the extent that it was predicated on violations of express 12 warranties because “an alleged breach of a warranty—a contract—‘is not itself an unlawful act 13 for purposes of the UCL’”) (quoting Boland, Inc. v. Rolf C. Hagen (USA) Corp., 685 F. Supp. 2d 14 1094, 1110 (E.D. Cal. 2010)). “An act that breaches a contract may also breach the UCL, but 15 only when the act is unfair, unlawful of fraudulent for some additional reason.” Boland, 685 F. 16 Supp. 2d at 1110. However, to the extent plaintiffs intend for their UCL “unlawful prong” claim 17 to be predicated on their claim of breach of implied warranties in violation of the Song-Beverly 18 Act, that alleged violation could serve as a predicate for their UCL claim. See Elias v. Hewlett- 19 Packard Co., No. 12-cv-00421-LHK, 2014 WL 493034, at *11, n.12 (N.D. Cal. Feb. 5, 2014) 20 (distinguishing between express warranty claims and implied warranty claims under the Song- 21 Beverly Act in determining whether the alleged violation can be borrowed for the UCL 22 “unlawful” prong). Thus, out of an abundance of caution, even though plaintiffs did not specify 23 any predicate “borrowed” law underlying their UCL claim, the court will grant defendant’s 24 motion to dismiss this claim but only in part. 25 Accordingly, defendant’s motion to dismiss plaintiffs’ UCL claim based on the 26 “unlawful” prong—to the extent it is predicated on plaintiffs’ fraud and express warranty 27 claims—will be granted. However, defendant’s motion to dismiss plaintiffs’ UCL claim based on 28 ///// 1 the “unlawful” prong—to the extent it is predicated on plaintiff’s implied warranty claim under 2 the Song-Beverly Act—will be denied. 3 3. “Unfair” Prong 4 Whether conduct is unfair can be determined by application of a balancing test, whereby 5 the court balances the impact of a business practice on its alleged victim against the “reasons, 6 justifications, and motives of the alleged wrongdoer.” S. Bay Chevrolet v. Gen. Motors 7 Acceptance Corp., 72 Cal. App. 4th 861, 886 (1999). In conducting this balancing courts look for 8 whether the harm to the consumer is outweighed by the utility of the defendant’s practice. 9 Lozano, 504 F.3d at 735–36. 10 In their complaint, plaintiffs allege that “defendant’s action of using a defective battery in 11 the vehicle causes injuries to consumers, like plaintiffs” because they cannot use or park their 12 vehicle as advertised. (Doc. No. 1-1 at 16.) But plaintiffs do not allege that they have personally 13 suffered any injury with regard to their vehicle. Indeed, these same allegations have already been 14 found by another court to be insufficient to state a cognizable UCL claim under the “unfair” 15 prong against GM relating to its Bolt advertisements. See Rodrigues v. Gen. Motors LLC, No. 16 23-cv-04488-WHA, 2023 WL 8852740, at *5 (N.D. Cal. Dec. 21, 2023) (dismissing UCL claim 17 and noting that “no injury to plaintiffs on account of their vehicle has even been alleged here — 18 and certainly not an ongoing one”). 19 In addition, the conduct by GM that plaintiffs allege was unfair is actually “coextensive” 20 with the conduct that underlies plaintiffs’ fraud claims. As a result, plaintiffs’ UCL claim under 21 the “unfair” prong is subject to the heightened pleading standard of Rule 9(b), which plaintiffs 22 have failed to satisfy. See In re Intel Corp. CPU Mktg., Sales Prac. and Prod. Liab. Litig., 2023 23 WL 7211394, at *2 (9th Cir. Nov. 2, 2023) (affirming a district court’s dismissal of the plaintiffs’ 24 UCL unfair conduct claim because the plaintiffs’ allegations “were coextensive with those of the 25 previously dismissed omission-based claims”). For this reason, another district court has 26 dismissed a UCL “unfair” prong claim based on the same allegations that plaintiffs have alleged 27 in this case. See McDonald, 2024 WL 1601851, at *5–6 (dismissing the UCL claim and 28 explaining that “plaintiff’s entire UCL claim is grounded in fraud because it relies on the theory 1 that Defendant engaged in fraudulent conduct by knowingly misrepresenting the Bolt as safe and 2 a “leading electric vehicle” while failing to disclose its “serious safety concerns,” and “plaintiff’s 3 claim, thus, concerns a ‘unified course of fraudulent conduct’”) (quoting Vess v. Ciba-Geigy 4 Corp. USA, 317 F.3d 1097, 1104 (9th Cir. 2003)).3 5 For these reasons, defendant’s motion to dismiss plaintiffs’ UCL claim brought under the 6 “unfair” prong will be granted. 7 C. Leave to Amend 8 Leave to amend should be granted “freely” when justice so requires. Fed. R. Civ. 9 P. 15(a). The Ninth Circuit maintains a policy of “extreme liberality generally in favoring 10 amendments to pleadings.” Rosenberg Bros. & Co. v. Arnold, 283 F.2d 406, 406 (9th Cir. 1960). 11 Reasons “such as undue delay, bad faith or dilatory motive . . . repeated failure to cure 12 deficiencies . . . undue prejudice to the opposing party . . . [or] futility” may support denial of 13 leave to amend. Foman v. Davis, 371 U.S. 178, 182 (1962). A district court “should grant leave 14 to amend even if no request to amend the pleading was made, unless it determines that the 15 pleading could not possibly be cured by the allegation of other facts.” Cook, Perkiss and Liehe, 16 Inc. v. N. Cal. Collection Servs., 911 F.2d 242, 247 (9th Cir. 1990). 17 In their opposition to the motion to dismiss, plaintiffs first request that the court grant 18 them leave to file an amended complaint “to address the issues raised by [defendant’s] motion,” 19 and then second request in their conclusion that the court grant them “leave to amend the 20 complaint consistent with the arguments made herein.” (Doc. No. 6.) However, as noted above, 21 plaintiffs’ opposition did not in any way address the bulk of the arguments advanced in the 22 motion to dismiss and they advanced just a few perfunctory arguments of their own. Plaintiffs 23 also did not proffer any allegations that they would include in an amended complaint, though they 24 do state that they can attach a copy of their warranty agreement to an amended complaint. (Id. at 25 7.) Moreover, as alluded to above, plaintiffs’ counsel has represented several individuals who 26 3 Plaintiffs’ counsel in this action is the same counsel of record for the plaintiffs in McDonald, 27 and counsel used the same boilerplate allegations in both complaints, as well as numerous other complaints in which counsel represents individuals in lawsuits brought against GM regarding the 28 Bolt vehicle. 1 purchased a Bolt vehicle in lawsuits against GM based on the same allegations asserted by 2 plaintiffs in this action, and counsel has repeatedly employed template/boilerplate allegations 3 despite courts pointing out the deficiencies with those pleadings. In sum, plaintiffs have not 4 demonstrated that leave to amend should be granted under the circumstances presented here. 5 Nonetheless, the court will grant plaintiffs an opportunity to file an amended complaint. 6 Plaintiffs are warned, however, that they should only file an amended complaint if they can 7 meaningfully attempt to cure the deficiencies that have been identified by this court, by 8 defendant, and by the courts in the several cases in which plaintiffs’ counsel are representing 9 other individuals in their lawsuits asserting the same claims against GM. Plaintiffs are further 10 cautioned that the court will not be inclined to grant further leave to amend if they do not use this 11 opportunity to meaningfully amend their complaint. 12 In addition, the court notes that plaintiffs filed their complaint initiating this action in San 13 Joaquin County Superior Court, and defendant removed this action based on diversity jurisdiction 14 pursuant to 28 U.S.C. § 1332. (Doc. No. 1.) In the joint case management statement that the 15 parties filed on May 14, 2024, the parties state that “[i]f the Court dismisses the fraud cause of 16 action, Plaintiffs will stipulate that the damages at issue are less than $75,000 and the matter 17 should be remanded.” (Doc. No. 12 at 2.) Based on this representation, it appears that plaintiffs 18 may opt not to file an amended complaint in this action and instead seek to remand this case back 19 to state court and pursue only their warranty and repair claims in that forum. The court will 20 therefore also direct plaintiffs to clarify their intentions in this regard. 21 CONCLUSION 22 For the reasons explained above, 23 1. Defendant’s motion to dismiss (Doc. No. 5) is granted, in part, as follows: 24 a. Plaintiffs’ fourth cause of action of common law fraud is dismissed, with 25 leave to amend; 26 b. Plaintiffs’ fifth cause of action of a violation of the UCL based on the 27 “fraudulent” prong, “unfair” prong, and “unlawful” prong predicated on 28 plaintiffs’ fraud and express warranty claims, is dismissed, with leave to 1 amend; and 2 C. Defendant’s motion to dismiss plaintiffs’ UCL claim based on the 3 “unlawful” prong, to the extent that claim is predicated on plaintiffs’ 4 implied warranty claim, is denied; 5 2. Within fourteen (14) days from the date of entry of this order, plaintiffs shall file 6 their first amended complaint, or alternatively, a notice of their intent to not file a 7 first amended complaint and to proceed only on the first through third causes of 8 action brought in their original complaint, which were not challenged in 9 defendant’s motion to dismiss, and their fifth cause of action but only to the extent 10 that the UCL “unlawful” prong claim is predicated on plaintiffs’ implied warranty 11 claim; 12 3. If plaintiffs opt not to file a first amended complaint, then within fourteen (14) 13 days from the date of entry of this order, plaintiffs shall also file either a notice 14 clarifying their intent to seek an order remanding this action back to the San 15 Joaquin County Superior Court, or a stipulation to remand this action; and 16 4. Plaintiffs are warned that their failure to comply with this order may result in 17 dismissal of this action due to plaintiffs’ failure to prosecute. 18 IT IS SO ORDERED. | Dated: _May 23, 2024 □□□ A. 2, axel 20 DALE A. DROZD UNITED STATES DISTRICT JUDGE 22 23 24 25 26 27 28 16